Italy's Central Bank Reiterates No Minimum Threshold for Crypto Transfer Sanction Screening
The Bank of Italy requires payment service providers and crypto asset service providers to review and improve the implementation mechanisms for EU and domestic sanctions, reiterating that there should be no minimum amount threshold for sanction screening of crypto asset transfers.
In a notice dated September 7, intermediaries are required to identify business related to sanctioned entities, enforce asset freezes, and report information. Violations can face both administrative and criminal penalties under domestic law. According to the revised funds transfer regulations and the European Banking Authority EBA/GL/2024/15 guidelines, institutions must establish internal policies and automated screening systems to check whether the payer and payee are on the sanctions list before executing funds or crypto asset transfers. The guidelines will apply in Italy from December 30, 2025. The central bank explicitly requires that there be no minimum amount threshold limiting the scope of screening, and third-party vendor systems must also not overlook any thresholds.
Instant transfers have special arrangements for payment service providers under EU rules: they are not allowed to conduct pre-transaction screening for both parties in an instant payment, but must verify all customers at least daily and recheck after new restrictions come into effect. Domestic fund transfers within Italy can be subject to similar arrangements at the discretion of payment service providers. Crypto asset service providers are not subject to the above exemptions and must conduct complete screenings for each crypto asset transfer according to guidelines 19 and 20. Customer screening must also occur at the time of establishing relationships and updating lists. Automated systems must balance reducing false positives with identifying sanctioned entities. Institutions must report to the Bank of Italy according to guideline 4.3.3.
The buy-side aims to push all sanction list verifications down to the transaction level for regulatory authorities, while the sell-side has previously used low thresholds or instant payment exemptions to reduce friction. The flow of funds remains unchanged; what changes is whether each transaction can be released before verification is completed. The beneficiaries are the enforcement density of the sanction list; the pressure is on the automated screening costs and false positive handling for crypto asset service providers—instant euro payments can be exempted based on daily customer checks, while on-chain transfers are written as having no equivalent exit.
Source: Public Information
ABAB AI Insight
The Bank of Italy is not creating new obligations this time but reiterating the already effective European Banking Authority guidelines: the 2024/15 guidelines will apply by the end of 2025, and the September notice targets operations that still have amount thresholds hidden in their systems. After the funds transfer regulations brought crypto asset transfers into the same traceable framework as fiat currency transfers, screening has shifted from "only checking large amounts" to "checking every transaction." Criminalization has increased the personal risk for compliance officers, making thresholds no longer an efficiency parameter that can be internally decided.
The capital pathway shifts screening costs from risk-weighted to fixed costs. Payment companies can still rely on instant payment rules for daily customer checks, while crypto asset service providers must prepare payer and payee comparisons and freezing processes for each on-chain transfer, including outsourced systems. Small amount splitting was once a common way to evade the list, but zero thresholds have closed that loophole. The MiCA license only addresses market access; sanction screening determines whether a transaction can exit the gateway.
In contrast to the full coverage and travel rules of the US OFAC for virtual currencies, Italy separates payment and crypto tracks in writing exemptions to avoid instant euro payments being dragged down by the same pre-transaction screening, while also closing loopholes on the crypto side. The industry is in a period of tightening regulation, shifting from anti-money laundering customer due diligence to real-time interception of sanction lists.
This is a regulatory change. The mechanism is: list obligations are triggered by both entities and transactions, and exemptions are granted based on the type of payment instrument, not on the amount. Whoever can make crypto transfers "like instant euros with only daily customer checks" has not yet been allowed by this notice; whoever has left a 1 euro threshold in their system has already violated in writing.
ABAB News · Cognitive Law
Once the amount threshold for sanction screening is removed, small amount splitting is no longer a compliance strategy.
The same list applies, with instant exemptions for payment tracks, while crypto tracks often do not have them.
The regulation reiterates already effective rules, targeting backdoors that have not yet been removed from the system.